Information About the Pag-IBIG Housing Loan

Not everyone is lucky enough to be able to buy a house for sale whenever they feel like it. Other than the fact that being a homeowner is a huge step that requires careful consideration, owning a home also requires quite a lot of money, which not everyone has access to. Fortunately for those who are short on finances, the Pag-IBIG Housing Loan is one of the home loan options that they have to make their dreams a reality.

The goal of the Pag-IBIG Housing Loan is to assist its members in:

a. Buying a 1,000-square meter or less, fully developed piece of land in a residential location

b. Buying a house and lot, condo unit or townhouse that has a parking space (can be an old or a new property, one that has been mortgaged with Pag-IBIG or an asset that has been acquired)

c. Having a house constructed on a piece of land that they already own

d. Paying for the improvement of a home that they own

e. Refinancing their mortgage loan (on the condition that the loan has a repayment history of at least 24 months with the original lending institution; and that, within a year before the date of the application, the loan has not been in default)

f. Financing the combination of either a and c, b and d, e and d; or refinancing the loan for a lot that was purchased for the purpose of a residential unit construction

A member borrower can avail of a Pag-IBIG Housing Loan in these three simple methods:

- The member can approach the Fund with the assistance of the developer, and the developer will offer a buyback guaranty that will take effect in case the member fails to pay his monthly contributions or his amortization payments.

- The member can apply for a loan with the help of the developer, who will not offer the guaranty of a buyback.

- If he so chooses, the member can apply for the loan himself. 

These are the eligibility requirements of members who wish to apply for a Pag-IBIG Housing Loan:

a. The member has to have been making contributions for at least 24 consecutive months as a member of Pag-IBIG I or II, or the Pag-IBIG Overseas Program (POP). If the member is short on the required number of monthly contributions, he can choose to pay a lump sum based on the mandatory monthly contribution rates for members.

b. The member should be 65 years old at most at the application date and should be eligible for insurance. He should also only be 70 years old or below when the loan reaches maturity.

c. The member should be lawfully permitted to purchase real estate property.

d. The member should pass the checks regarding his background/credit as well as his employment/business.

e. The member should have no outstanding Pag-IBIG housing loan, whether as a principal or as a co-borrower.

f. The member should never have has a Pag-IBIG housing loan that was foreclosed, cancelled, bought back because of default or undergone dacion en pago.

g. The member should, at the date of his application, not have any outstanding Pag-IBIG multi-purpose loan in arrears.

In the second part of this series, the procedures involved in a Pag-IBIG Housing Loan application will be covered.

Guidelines for Avoiding Foreclosures

A foreclosure is, to put it in simple terms, when a lender decides to take back a house or any property from the owner and sells it off when the owner can’t afford to keep paying for the mortgage. Foreclosures in the Philippine real estate industry happen in two methods:

Judicial foreclosure – During a judicial foreclosure, the lending company goes to the Regional Trial court of the city where the property can be found, and they ask the judge to send a notice to the owner, which will give him 1 to 3 months to pay off whatever remains of the mortgage. If the owner fails to comply, a public auction is held to sell the property.

Extrajudicial foreclosure – In an extrajudicial foreclosure, the court does not get involved. The lender instead asks a sheriff or a notary public to supervise the foreclosure sale. However, this type of action can only happen if the foreclosure notices had been duly printed and sent.

A foreclosure might take you out of your misery as far as your mortgage is concerned, but what it will leave you is a bad mark on your credit history, which can affect you negatively in the future. You can prevent this from happening if you follow these suggestions.

Be honest. As much as you would rather run from your lender, you should instead be frank about what is going on by telling them if you are having trouble paying your mortgage loan because you’re going through a rough patch in your finances. Doing this will show them that you intend to pay back what you owe them. Telling the truth can also help you in another way; if your lender knew what was up, they might be inclined to help you. Aside from the fact that a foreclosure will also cost them money, banks are not allowed to have a large percentage of bad loans, so they’d be doing themselves a favor, too.

Refinance your home. Granted that your payments have not been defaulted yet, you can get a home loan refinancing from another bank or lender. A home refinancing will give you more time to pay off your debt and at lower interest rates, which means that your amortizations will not be too difficult to manage.
Ask about a mortgage modification. A lender might prefer to give you a loan restructuring in place of a property foreclosure. If you choose to get a mortgage modification, some of the things that will make your payments easier are lower monthly amortizations and a longer loan term. A loan restructuring also offers benefits to the lender: since banks hate having bad debts, helping you out will ensure that yours is an earning and performing loan.

Do a short sale. When you do a short sale, it means that you are trying to sell your home as fast as you can so that it won’t be foreclosed. At this point, you’re just trying to get the amount of your mortgage’s balance, so you shouldn’t expect that you can sell your property for its full price. What you do have control of, however, is that selling process, since a short sale is just like any other real estate sale, only faster.
Foreclosures are one of those worse-comes-to-worst situations that no one wants to see happen to them. However, as we never know what will happen in the future, it’s better to be ready for anything.

Get Your Mortgage Pre-Approved With These Simple Tips

Obtaining a pre-approval for a mortgage loan is one of the most important stages that you need to accomplish to buy a house for sale. When you get pre-approved for a loan, you find out how much loan you can avail of, and this will help you determine your budget for buying a house. These steps will help you get a mortgage pre-approval so that you can start getting serious about house buying.

1. Make sure that you start looking for a mortgage lender even before you begin looking at houses on the market to know your budget. Go to as many as three lenders so that you can get a picture of the various loan options you can choose from.

2. Every time that you visit a lender, make sure to bring with you an organized file containing your financial history. The way that you have been managing your finances in the past years, as seen in documents like tax returns, pay stubs and bank statements, will let a lender know how responsible you will be in paying off your mortgage loan should they approve it.

3. Prior to making a selection, be absolutely certain that your lenders are only those that are trustworthy and reputable. If a seller finds out that the lender you chose has a tendency to not pay out a mortgage loan, they will refuse to sell their house to you. In addition, even if you get a pre-approval from one company, you can still get your actual loan from another lender, since a preapproval is not binding and is only a guarantee that you will be able to get a loan.

4. All mortgage pre-approvals are valid for only a specific period of time (usually about three months), so be sure that you have found a house by then. If you haven’t finalized your selection of a property, remember to ask your lender to revalidate your pre-approval. The importance of doing this is that it will serve as a reassurance to the seller that your financial condition has not suddenly changed from the date that your mortgage was pre-approved.

By getting a mortgage loan pre-approval, you can easily speed up your search for the real estate property you want. Home sellers and realtors will take this as a sign that you are earnest about finding the home of your dreams.

Putting Your Home Up for Rent

Job relocation and the wish to invest in real estate are only some of the reasons why people choose to buy another property. When they go ahead and make the purchase, they are often unsure as to what to do with their first house. For those who need more money to be able to purchase their new home, selling their first one is an easy enough decision to make. If you don’t have an urgent need for the money that you can get selling your home, why not offer it as a house for rent? To make sure that you will be successful in your decision to rent out your house, here are some important things to keep in mind.

Hire a lawyer to help you. As a new landlord, you will need a lot of help figuring out how to do your taxes, something that a lawyer can help you with; he can tell you which of your expenses are deductible if you qualify because of your rental property. Aside from that, there are other ways that a lawyer can be of service to you, such as in drafting a contract in accordance to your area’s specific laws, as well as in understanding laws concerning tenants and landlords.

Get ready to face the duties. When you rent out your property, you get to enjoy the perks of being a landlord, such as the steady income, but don’t forget that being a landlord has a lot of responsibilities as well. Are you fully aware of and are ready to take on the problems of being a landlord? Be sure that you are prepared to take on vandalism, home maintenance, issues between neighbors and other issues that can crop up.

Prepare your home. In a real estate market that is constantly changing, you can’t be sure about when you’ll find a renter to live in your property. Individuals or families who are checking out houses forrent are sure to find your house attractive if you clean it very well from the inside out. If you find anything in the house that needs to be repaired, attend to them as soon as you can. It would also be advisable for you to let people know about your new venture by listing it in MyProperty.ph, broadcasting it in social media like Twitter and Facebook, and placing an ad in newspapers.

Determine the right price for your rental. By checking out other properties in your location that are being offered as rentals, you will have a good basis as to how much you ought to be asking for in rent money every month. Don’t forget to stress the things that set your property apart from the others, as yours will only be one of the many houses that tenants will be looking at before they decide.

Find your ideal tenants. You can find out if your future renter will be able to pay the rent on time if you have a look at their credit histories. In addition, since this is a house that you took care of very well, you would prefer to have a tenant that will love it as much as you do. Just to make sure that you are not making a mistake, ask them to give you a recommendation letter from a previous landlord attesting to their status as tenants.

Putting a property out for rent is a lot more complicated than just finding a tenant to fill your property with, and then claiming their rent money after 30 days. Although managing a rental has a lot of advantages, you can only fully enjoy them if you started the process right in the first place.

More Reasons Why Location is Important in Real Estate

One of the most important things to consider, whether you are looking for a condo for rent or a house for sale is its location, and this point has been stressed by many a real estate expert time and time again. In a recent news article, this point was once again brought to light as several real estate professionals in the Philippines offered their opinion on the traits that an ideal residential location in the country should have. I was able to cover many of their points in a previous writing, so I’d like to touch upon the things that they think should also be given equal attention.

Cost of living

In addition to the price of properties for sale or for rent, it is also necessary to think about what basic necessities cost in the area, particularly for those who are raising families. If you miscalculate, you might be at risk of spending more than you can afford on things like food and gas.

Employment opportunities

There are those who leave their jobs when they move because they feel that the travel to and from their new home would be too much. If you are in this situation, make sure that there is a job waiting for you in your new area.

Opportunities for outside businesses

It would be great if outside investors are given the thumbs-up by the local government and the city developer to launch their businesses within the area. This set-up can become a win-win situation for the businesses and the city itself, as it can maintain the financial security of the area and ensure that it will also continue to develop.

Cleanliness

To ensure that your family remains healthy, the environment of the location should be of excellent quality, meaning that it should have a very low level of pollution, and it should also promote eco-friendliness.

Area diversity

For expatriates who are considering living in the Philippines, this would be a very important factor to keep in mind. Living in a community where you are well-liked and accepted by the residence can make the adjustment of living in a foreign land that much easier. Also, having a diverse environment will make sure that the people’s cultural knowledge is continuously enriched.

Remodel Your Home to Accommodate Elderly Family Members

Many if not all Filipinos have always found it only right to have their aging parents or grandparents live at home with them, instead of relocating them to nursing homes, retirement villages and other similar accommodations for the elderly. As their children or grandchildren, we want to take on the responsibility of caring for them just like they did for us when we were young. Making a number of important renovations to your house will really help you accomplish your responsibility of keeping them safe.

All over your home:

• If your house has two or three stories, it would be better to have them stay in a room on the ground floor to avoid accidents while repeatedly using the stairs. In case all of the bedrooms are in the second floor and there is no room to spare on the first, affix a hand rail on the wall along the stairs to provide additional support.

• Soft lighting might make it difficult for them to make their way to different places in the house, so replace them with more intense fluorescent lamps.

• If they need wheelchairs to get from one place to another, it would be helpful to adjust the positioning of your furniture to keep the pathways clear, and to equip entryways with ramps.

• For floor surfaces that are a bit on the slippery side, wall-to-wall carpeting could be an option; laying rugs around the house won’t help much because if they don’t lie flat, your relatives can trip on them.

The bedroom:

• If walking proves too difficult for them to do, encourage them to ask for assistance in doing something by placing a bell in their room that they can ring to get attention.

• It would be better to put their clothes and other personal things in the room where they won’t have to bend over to reach, since many elderly people find bending to be too painful to do.

The kitchen:

• Place their plate, glass and utensils on the kitchen counter, table or any other place where they can be easily found, instead of putting them away in drawers and cabinets.

• Prevent them from having to reach high or bend low to use cooking devices like the microwave oven by placing them at waist level.

• You can ensure that they will easily find the important information that you write down like emergency numbers, as well as your address and phone number, by mounting a notice board on the fridge or on the wall.

The bathroom:

• Keep them from drowning by accident by taking out your bathtub and installing a shower instead.

• Help them brace themselves while showering by affixing a hand rail to the wall. A non-slip mat can further prevent them from slipping and getting hurt.

• Allow them to sit while taking a bath by placing a bench in the shower with them.

Because our grandparents and elderly parents will require assistance in a lot of things, it is necessary for us to make getting around our home easy for them to do. There is no question that some of the changes mentioned will require some money and a bit of an adjustment in our part, but the knowledge that our loved ones are comfortable and secure will be worth it.

Taxes and Other Money Issues in Philippine Real Estate

One of the biggest dreams that every Filipino has is to buy a certain form of real estate property, like a house for sale. The process of buying a property is one that is big and complex, and should therefore be approached with extreme caution. When talking about money in real estate, it’s essential to keep in mind that the actual price of the property is not the only thing that you need to take care of. Here are some Philippine real estate money matters that you should familiarize yourself with before buying a property.

The Bureau of Internal Revenue requires house and other property developers to pay an income tax of 30% for every property that they sell. As a result of this, the buyer has to pay a 5% withholding tax based on what amount is higher among the price of the property, the zonal value or the tax declaration (TD) value of the property, and this is then credited to the developer’s income tax.

In addition, every time a sale of real estate property is made, the BIR requires a payment of value-added tax, which is based on 12% of the highest amount among the TD value, zonal value and price of the property.

The documentary stamp tax (1.5%) and the local transfer tax (half of 1%) are other taxes that are computed based on whichever is the highest rate among the property’s price, zonal value and TD value.

A certain amount is also paid as registration fees to the Register of Deeds where the property the buyer purchased is located. The buyer is responsible for paying P8,796.00 for the first P1.7 million. For every P20,000.00 or fraction of that amount that goes over P1.7 M, the buyer will pay P90.00.

Depending on the size and type of residence, association dues vary from property to property. For example, for every square meter of a condo, owners are required to pay from P75.00 to P90.00. Lot owners, on the other hand, pay association dues of P25.00 per square meter.

Keep in mind that when buying a house or any property, these are only a few of the money issues that you’ll need to handle. Your monthly bills, as well as future maintenance and remodeling needs are other financial needs that require your attention.